Why is the Hang Seng 50 index important to traders?
The Hang Seng 50 is an index of the 50 largest and most actively traded companies listed on the Hong Kong Stock Exchange. Founded as a “Dow Jones Index for Hong Kong”, the Hang Seng 50 serves as a benchmark index and the major indicator of Hong Kong’s market performance, as well as a proxy for a wider Asian market.
The HSI embraces the largest and most liquid stocks in the local market, largely dominated by finance companies. The components of the index are divided into four sub-indices: Finance; Commerce and Industry; Properties; and Utilities.
Traders like to follow the Hang Seng 50 index because it can offer exposure to substantial market price volatility and significant day-to-day fluctuations. The Hang Seng 50 is known for its volume and volatility compared to the other major indices, and attracts numerous day traders trying to profit from short-term price movements.
Hang Seng 50 trading hours
The Heng Seng companies are all listed on the Hong Kong Stock Exchange (HKEX). The main trading hours for the Hang Seng 50 index are between 02:45 – 05.30 (GMT) for the first trading session, and 07:30 – 09:15 for the second trading session.
How is the Hang Seng 50 calculated?
Like other global stock market indices, the Hang Seng 50 index tracks a basket of individual companies, and changes in their share prices will affect the index throughout the trading day.
The HSI is calculated in real-time at 2-second intervals during the trading hours of the Hong Kong Stock Exchange (HKEX). The index weights its components according to their market capitalisation. Therefore, the biggest constituents enjoy a higher percentage weighting, while the smaller ones hold lower weights.
Hang Seng classification system and admission criteria
The Hang Seng index sub-divides its constituents into several different sectors according to the Hang Seng Industry Classification System. It considers the following factors:
- Sales revenue
Sales revenue is the key criteria for stock classification. Profit and assets are also considered.
- Major source of sales revenue
The class of the index component is determined according to where it receives the majority of its sales revenue.
Change of a component’s sector may happen due to a major update in a company’s business, such as a merger or an acquisition.
The nominees to the HSI have to meet the following criteria to enter the index:
- They must be among those that are within the top 90% of the total turnover on the Stock Exchange of Hong Kong
- They must have at least a 24-month listing history. Otherwise, they will have to meet the guidelines for newly listed large-capitalisation stocks.
- The HSI constituents are reviewed quarterly by Hang Seng Indexes Company Limited (HSIL) at the end of March, June, September and December each year.
How to trade Hang Seng CFDs
The Hang Seng 50 index represents the major companies of the Hong Kong exchange and covers almost 65% of its total market capitalisation. Due to Hong Kong’s status as a special administrative region of China, the index also serves as a proxy of a wider Asian market.
The HSI is a way to gain exposure to the Hong Kong stock market without having to analyse the performance of individual companies. The Hong Kong’s Hang Seng financial index typically provides traders with a high degree of liquidity, long trading hours and tight spreads.
You can trade the Hang Seng index live using CFDs (contracts for difference). Using CFDs to trade the Hang Seng 50 will allow you to go long or short the market without having to deal with conventional exchanges. You trade direct with your CFD broker.
The index has good volume and volatility as it is made up of a wide cross-section of liquid trading instruments, making the Hang Seng 50 popular with CFD traders around the world.
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Trading on margin: Providing trading on margin (20:1 for major indices), Capital.com gives you access to the Hang Seng 50 index with the help of CFDs.
Trading the difference: By trading CFDs on the Hang Seng index, you don’t buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of its price. CFD trading is no different from traditional trading in terms of its associated strategies. A CFD investor can go short or long, set stop and limit orders and apply trading scenarios that align with his or her objectives. So whether your view is positive or negative, you can trade Hang Seng 50 in both directions.
All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.
Focus on safety: Capital.com puts a special emphasis on safety. Licensed by the FCA and CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.
Businesses on the Hang Seng 50
On 2 January 1985, the index was divided into 4 sub-indices, in order to make it clearer and classify the constituent stocks according to four major sectors: Finance, Commerce and Industries, Utilities and Properties:
A list of the current companies trading on the Hang Seng today, correct as of November 2018:
HSI – Finance
HSI – Properties
HSI – Utilities
Hang Seng Bank
HK & China Gas
New World Dev
China Res Power
Hang Lung PPT
Boc Hong Kong
China Res Land
Bank Of China
HSI – Commerce & Industry
Swire Pacific A
Want Want China
Sands China LTD
History of the Hang Seng 50
Maintained and regulated by Hang Seng Indexes Company Limited, the Hang Seng Index was first published in its current form on 24 November 1969.
Historically, the Hong Kong Stock Index reached an all-time high of 33,154.12 in January 2018. The HIS’s record low of 58.61 happened in August 1967.
The list of other milestone dates for the Hong Kong’s major financial index include the following:
The HSI’s Major highs and Lows
31 July 1964
The HSI was first published with a base value of 100 points
31 August 1967
The HSI hit its all-time low of 58.61
10 December 1993
The Hang Seng Index reached the 10,000 milestone
28 December 2006
The HSI reached the 20,000 point milestone
18 October 2007
The Hang Seng passed the 30,000 milestone
30 October 2007 –
The index lost 9,426 points, around 30%, in response to the global financial crisis
13 April 2015
The index closed at 28,016.34, the highest mark since 2007
24 June 2016
The market fell 1,000 points in response to the Brexit vote
12 January 2018
The index reached its all-time high of 33,154.12
On Tuesday, 6 November 2018, the Hang Seng increased 187 points or 0.72% up to 26,121 from 25, 934 in the previous trading session. To follow the most recent ups and downs of the Hong Kong 50 index, check out our live Hang Seng Index (HIS) price chart.
Though the HSI is the most frequently quoted index for the Hong Kong’s stock market, there are a number of other related indices, which include mid- and small-cap companies.
These include the Hang Seng:
- China Enterprises
- China-Affiliated Corporations
- China H-Financials
- Corporate Sustainability
- Mainland 100
- HK 35
- China 50
- H-Share Index ETF-HK
- China AH Premium
- HIS Volatility
- China A Industry Top
The Hong Kong Stock Exchange (HKEX) is one of the leading market operator’s in the world. Positioned at the intersection of the international and Chinese capital flows, Hong Kong has been successfully connecting Chinese markets with the rest of the world for many years.
Today, the HKEX has grown into the sixth largest stock market in the world, and the third largest in Asia, after the Japan’s Tokyo Stock Exchange and China’s Shanghai Stock Exchange.